DGAP-News: Scout24 AG / Key word(s): Half Year Results
Scout24 generates stable revenue and improves margin in the first half of 2020 despite Covid-19 pandemic
Thanks to short-term cost measures, the ordinary operating EBITDA margin still came out at 60.0% in the second quarter of 2020 (Q2 2019: 61.7%). Cost optimisation and saving measures primarily related to the areas of personnel and marketing. The half-year margin was 61.0%, 1.6 percentage points up on the previous year (H1 2019: 59.4%).
KEY FINANCIALS (GROUP, CONTINUING OPERATIONS)
"The last few months have shown that our focus on the three customer groups agents, home seekers and home owners is the right strategy. Our Covid-19 support programme was also clearly aimed at these target groups. We want to further expand the partnership with our agents, ensure an attractive offering on our marketplace and support home owners in selling their property and finding the right tenants. This is our ambition, and we continued to focus on that during the past quarter. At the same time, we want to make it easier to conduct real estate transactions digitally and increase the market's efficiency. The need to make progress in this regard was evident during the pandemic," says Tobias Hartmann, CEO of Scout24 AG, commenting on developments in the first half of 2020.
"The real estate market proved very robust during the Covid-19 pandemic and the first half of 2020 has demonstrated the resilience of our business model. Although we recorded declining revenue in the second quarter, especially in April and May, if we look at the first half of the year, we were able to increase revenue and margins in this challenging environment. We are therefore very satisfied with the development of the Scout24 Group's results of operations and financial position in the reporting period. Hence, we are in a position to resume guidance for the year 2020," explains Dirk Schmelzer, CFO of Scout24 AG.
AutoScout24 transaction closed and new segment structure introduced
On 31 March 2020, Scout24 received the provisional purchase price of EUR 2,838.7 million as consideration for the sale of AutoScout24, FinanceScout24 and FINANZCHECK, which was completed on 1 April 2020, less an amount of EUR 350.0 million used directly for debt repayments. Control of the entities sold was transferred to the buyer on 1 April 2020. The assets held for sale and related liabilities recognised in accordance with IFRS 5 were derecognised in full as of 1 April 2020. The gain realised on the disposal of AutoScout24 is reflected in equity at the end of the half-year 2020 period. Equity amounted to EUR 3,096.3 million as of 30 June 2020 (31 December 2019: EUR 1,053.9 million), which corresponds to an equity ratio of 81.3% (31 December 2019: 43.3%).
Since the second quarter of 2020, a new segment structure has been in effect comprising the three segments Residential Real Estate, Business Real Estate and Media & Other for the continuing operations of ImmoScout24, which was applied retrospectively to the presentation of the relevant financial information for the first quarter of 2020 and the first half of 2019. The development of revenue and ordinary operating EBITDA is shown separately for each of the segments.
Residential Real Estate business proves most resilient in the crisis
The Residential Real Estate business accounted for the largest share of ImmoScout24's total revenue with 71% in the first half of 2020 (H1 2019: 70%). The segment benefited in particular from revenue with real estate agents secured under annual contracts. Accordingly, revenue in the Residential Real Estate segment was only down 1.6% in the second quarter of 2020. Revenue with professional customers, i.e. agents, property managers and finance customers (savings banks and other banks), increased by 1.9%, while revenue with consumers decreased by 8.7% in the second quarter due to targeted pricing measures. Overall, Residential Real Estate segment revenue increased by 2.7% in the first half of the year, from EUR 120.0 million in H1 2019 to EUR 123.2 million in H1 2020.
As the sale of add-on products (e.g. Realtor Lead Engine) and the migration to higher-value memberships got off to a promising start in the 2020 financial year, the focus in the second quarter of 2020 was placed on customer retention and securing customer loyalty. In the first half of 2019, 811 more core customers were added to the platform. As of 30 June 2020, the number of residential real estate partners totalled 17,020. ARPU for the first half of the year was EUR 709 (Q1 2020: EUR 729; Q2 2020: EUR 690), 4.1% higher than in the previous year.
The ordinary operating EBITDA margin in the Residential Real Estate segment was 64.5% in H1 2020, up 1.7 percentage points on the previous year's margin of 62.8%.
Business Real Estate also grows slightly compared with the first half of the previous year
The Business Real Estate segment accounted for around 20% of ImmoScout24's external revenue in the first half of 2020. While Business Real Estate revenue was also down in the second quarter (-3.4%), it nevertheless grew slightly by 1.4% compared with the first half of the previous year, from EUR 34.1 million to EUR 34.6 million. This is primarily due to increased revenue with business real estate agents, especially due to the high share of (contractually fixed) core revenue, while revenue with project developers remained relatively stable. The number of business real estate partners decreased slightly year-on-year by 13 to 2,795 partners as of 30 June 2020. ARPU for the first half of the year was EUR 1,747 (Q1 2020: EUR 1,811; Q2 2020: EUR 1,706), 1.8% higher than in the previous year.
The Business Real Estate segment achieved an ordinary operating EBITDA margin of 72.1% in H1 2020 (up 3.9 percentage points from 68.2% in H1 2019).
Media & Other segment records declining revenue but stable margin
Contributing a 9% share of revenue, the Media & Other segment revenue declined by 12.2% to EUR 15.1 million in the first half of 2020. Advertising revenue suffered most in this context, both from the general market contraction of the media business and as a result of Covid-19. The subsidiary FlowFact recorded lower revenue primarily due to the prolonged process of migrating products to the new cloud solution. ImmoScout24 Austria was able to generate growth in both quarters, Q1 and Q2.
Also, the weaker-margin Media & Other segment was able to raise its profitability compared with H1 2019, namely by 0.4 percentage points to an ordinary operating EBITDA margin of 40.4%.
KEY FINANCIALS AT A GLANCE
2 Ordinary operating EBITDA refers to EBITDA adjusted for non-operating effects, which mainly include expenses for share-based payments, M&A activities (realised and unrealised), reorganisation, strategic projects and other non-operating effects.
3 The ordinary operating EBITDA margin of a segment is defined as ordinary operating EBITDA as a percentage of external segment revenue.
4 Source: ImmoScout24.de; listings in Germany (average as of the end of the month)
5 Unique monthly visitors to the German IS24 marketplace (average of the individual months), irrespective of how often they visit the marketplace during the month and irrespective of how many different platforms (desktop and mobile) they use; Source: AGOF e. V.
6 Number of all monthly visits (average of the individual months) in which individual users interact with the website or app via a device; a visit is considered completed if the user is inactive for 30 minutes or more; source: internal measurement using Google Analytics
Earnings after tax increase stronger than ordinary operating EBITDA
The Group's (unadjusted) EBITDA increased by 31.1% to EUR 96.4 million (H1 2019: EUR 73.5 million). This is mainly due to higher personnel expenses from share-based payments and higher M&A-related expenses the year before.
The consolidated earnings from continuing operations attributable to the shareholders of the parent company increased significantly in the first half of 2020 by 62.0% to EUR 44.2 million (H1 2019: EUR 27.3 million). Based on the volume-weighted average number of shares of 104,244,555, (basic) earnings per share from continuing operations amounted to EUR 0.42 in the first half of 2020 (H1 2019: EUR 0.25; number of shares: 107,600,000).
The new guidance for the year 2020 underscores the resilient business model
For the Scout24 Group, the Management Board expects Group revenue this year to be roughly on a par with the previous year and the Group's ordinary operating EBITDA margin at around 60%.
By segment, the full year 2020 revenue guidance is as follows:
The Management Board expects an aggregate EBITDA margin for all three segments of around 62%.
This forecast reflects the business development in the first half of the year and the current business and market dynamics. The guidance underscores:
As the environment remains more volatile and uncertain than before the Covid-19 pandemic, the guidance is premised on the following additional assumptions:
Thanks to its resilient business model, the Scout24 Group is well positioned to weather the current crisis together with its customers. The Management Board expects an acceleration of the digitisation of real estate transactions catalysed by Covid-19. This offers attractive growth potential, and Scout24 - as Germany's market leader - will play a leading role in driving this development forward.
The complete 2020 half-year report is available at www.scout24.com/en/investors/financial-reports-presentations.
On 13 August 2020 at 15:00 CEST, Scout24 will hold a webcast and conference call on the H1 2020 financial results.
Link to the live webcast (without telephone dial-in) https://webcasts.eqs.com/scout2420200813
Financial analysts and investors can dial into the conference call using the following dial-in numbers:
Phone conference participants can view the presentation slides live by clicking on the following link:
The replay of the conference is available at https://webcasts.eqs.com/scout2420200813
Next reporting dates
Scout24 plans to publish the results for the first nine months of the 2020 financial year on Wednesday, 11 November 2020.
Scout24 is one of the leading digital companies in Germany. With ImmoScout24, an online platform for residential and commercial real estate, we successfully bring together owners, realtors, tenants, and buyers to make complex decisions easy - and we have been doing so for more than 20 years. With around 14.8 million users per month, ImmoScout24 is the market leader for digital real estate marketing and search. To digitise the process of real estate transactions, ImmoScout24 is continually developing new products and building up an ecosystem for renting, buying, and commercial real estate in Germany. Scout24 is a listed stock corporation (ISIN: DE000A12DM80, Ticker: G24) and member of the MDAX. Further information is available on Twitter and LinkedIn. Since 2012, ImmoScout24 has also been active in the Austrian real estate market, reaching around 3 million users monthly.
The information contained in this release is subject to amendment, revision and updating. Certain statements, beliefs and opinions in this document are forward-looking, which reflect the Company's or, as appropriate, senior management's current expectations and projections about future events. By their nature, forward-looking statements involve a number of risks, uncertainties, assumptions and other factors that could cause actual results, including but not limited to the Company's financial position or profitability, to differ materially, also adversely, from those expressed or implied by the forward-looking statements. Statements contained in this document regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The Company does not undertake any obligation to update or revise any information contained in this document (including forward-looking statements), whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements, which speak only as of the date of this press release.
Scout24 also uses alternative performance measures, not defined by IFRS, to describe the Scout24 Group's results of operations. These should not be viewed in isolation, but treated as supplementary information. The special items used to calculate some alternative performance measures arise from the integration of acquired businesses, restructuring measures, impairments, gains or losses resulting from divestitures and sales of shareholdings, and other expenses and income that generally do not arise in conjunction with Scout24's ordinary business activities. Alternative performance measures used by Scout24 are defined in the "Glossary" section of Scout24's Group Management Report 2019 which is available at www.scout24.com/financial-reports.
Due to rounding, numbers presented throughout this statement may not add up precisely to the totals indicated, and percentages may not precisely reflect the absolute figures for the same reason. Information on the quarterly financials has not been subject to audit and is thus preliminary.
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